2012 Newly Elected County Officials Training

Idaho State Tax Commission Steve Fiscus, Admin., Property Tax

Statutes in Idaho Code County Government - Title 31 General Tax - Title 63 Urban Renewal - Title 50

Idaho State Tax Commission (ISTC) monitors quantity of appraisals and level of assessment.

I.C. 63-314 & Rule 314(frequency) I.C. 63-208 & Rule 131 & 217 (market value) I.C. 63-316 & Rule 316(enforcement)

Appraisal – I.C. §63-314 Vs.

Assessment – I.C. §63-301

Frequency of Assessment

• • “All real, personal and operating property subject to property taxation must be assessed annually….” (IC 63-205) – County assesses real and personal property – STC assesses operating property - (utilities and railroads) “Taxable property shall be appraised or indexed annually to reflect current market value.” (IC 63-314) – Appraisal includes field inspection (required at least every 5 years).

– Property not appraised in given year must be indexed to current market value.

– Current market value this year is the value of the property as of January 1, 2011 7

Market Value

Consider all three approaches to value (cost, market and income) Use of Ratio studies to determine equalization *you do not have to wait until the annual studies by the STC to utilize ratio analysis

Enforcement

Idaho Code 63-316 & Rule 316 The Tax Commission withholds sales tax distribution to pay for a reappraisal program to be completed.

Idaho Code 63-109 If the Tax Commission determines that values do not achieve proper assessment levels, the county is subject to State Board of Equalization actions

County Board of Equalization I.C. §63-501 to 511 (Training in Spring 2013) The BOE can meet monthly until the fourth Monday in June. At that point they meet daily, if necessary, to complete their business.

Also, meet in November for the sub-roll and in January for the missed roll.

What are the sub-roll and missed roll?

Appeals from the County BOE?

State Board of Tax Appeals

NOT THE STATE BOARD OF EQUALIZATION

63-3801 to 63-3814 or District Court

• Tax Commission Appraises Public Utilities and Railroads (AKA. Centrally Assessed) • I.C. §63-401 Apportions to Idaho Allocates values to Taxing Districts

The State Board of Equalization hears appeals of Centrally Assessed Properties and equalizes county values in August.

Taxing districts hold budget hearings and set budgets.

I.C. §63-801 to 63- 812

Budgets and levies are sent to the Idaho State Tax Commission for approval I.C. §63-809 (Training in May 2013)

Tax Levies are set by the Fourth Monday in October, sent to County Clerks and Treasurers Property Tax Bills mailed prior to the fourth Monday in November I.C. §63-902

Payments are due December 20 and June 20 NOT for ½ year but ½ payment.

I.C. §63-903

Delinquencies I.C. §63-1001 – 1015 The Tax Deed Process Counties may have internal policies

Urban Renewal I.C. Title 50 Chapter 20 URA vs. RAA

• • • Tax Increment Financing an economic incentive involving property tax Permits allocation of property taxes to urban renewal agency (URA) in specified areas Often used to help provide infrastructure: – Parking garages – Sewer and water lines – Street improvements Properties within these areas still pay taxes at prevailing rate, but money is not passed on to local taxing districts – Beginning in 2008, URAs no longer derive revenue from most voter approved levies and certain judgments against taxing districts.

20

School 29.4% $ 421.1 Mill

2012 Property Tax Use

City 27.1% $ 388.6 Mill 3.1% $ 4.7 Mill Cemetery 16.4% $ 24.8 Mill Jr. College 36.9% $55.5 Mill Fire Other 10.5% $ 150.7 Mill 43.6% $65.8 Mill Miscellaneous OTHER 10.5% Highway 6.4% $ 91.7 Mill TOTAL County 26.6% $ 381.0 Mill

So, who pays the property tax?

Distribution shown is statewide in Idaho for 2012 22

Fiscal Year 2009 Tax Burden

Idaho vs. Neighbor States Percent of U.S. average Based on per capita taxes. States compared to U.S. average.

FY 2009 Overall Tax Burden Idaho vs. Neighbor States Idaho Mt

Based on taxes per $ of income.

Nv Or Ut Wa Wy

FY 2009 Property Tax Burden Idaho vs. Neighbor States Idaho Mt

Based on taxes per $ of income.

Nv Or Ut Wa Wy

TAXES COLLECTED IN IDAHO PROPORTION OF STATE & LOCAL TAX REVENUE PROPERTY TAX IS CALENDAR YEAR; OTHERS ARE FISCAL YEAR

Idaho Fiscal Year 2010 Revenue State and Local Tax Revenue Motor Fuel $ 231.4 Mil.

5.8% Sales $ 1,120.8 Mil.

28.2% Corporation Tax $ 98.3 Mil.

2.5% Other $ 82.7 Mil.

2.1% Property $1,368 Mil.

34.5% Individual Income Tax $ 1,069.4 Mil.

26.9% Where the Money Came From Millions of Dollars Property Tax is Calendar 2010

Idaho Fiscal Year 2010 General Account State Tax Revenue Sales Tax $ 955.9

Corporate Income Tax $ 109.7

Other Taxes $ 41.8

Millions of Dollars Represents funds that go to the general fund refunds have been deducted.

Individual Income Tax $ 1,090.7

Where the money came from.

Health & Welfare $ 472.9 – 20.1% Idaho Fiscal Year 2010 General Account Appropriations Other Education $107.7 – 7.2% Colleges $ 248.5 – 16.5% All Education $ 1504.8 – 64.1% Public Schools $ 1,148.6 – 76.3% All Other $ 371.0 – 15.8% All Funding Education Funding Millions of Dollars

Other Funds $ 188.9

General Account $ 1,027.3

Where the Sales Tax Goes $ Million in Fiscal Year 2012

Building Fund $ 5.0

Water Pollution $ 4.8

Election Consolidation $ 4.2

Ag Replacement $ 8.5

Circuit Breaker $ 15.7

Business Inventory Replacement $ 60.4

County Revenue Sharing $ 39.0

City Revenue Sharing $ 39.0

Sales Tax Distribution Statute and Rule • • Distribution formulas are found in Idaho Code §63-3638 (9) Definitions and procedures are found in Property Tax Administrative Rule 995.

• Different Types of Sales Tax Distribution Distribution formula found in I.C. §63-3638 (9) – 11.5% continuously appropriated • Revenue Sharing – counties and cities only: – – 28.2% paid to various cities, 28.2% paid to various counties, • Base and Excess – all but school districts: – – 35.9% paid to several counties and cities, and 7.7% paid to Special Purpose Taxing Districts (SPTDs) – Paid quarterly • All but the City Revenue share money paid directly to each county. County then distributes money to each appropriate taxing district.

• City Revenue Sharing paid directly to each city.

Revenue Sharing County Only • How does this work?

28.2% of the 11.5% paid as follows: – $1,320,000 annually distributed 1/44 to each county. (equals $7,500 per quarter per county) – The balance shall be paid based on each county’s proportionate share of total state’s population.

County 10/18/2012

Ada County Adams County Bannock County Bear Lake County Benewah County Bingham County Blaine County Boise County Bonner County Bonneville County Boundary County Butte County Camas County Canyon County

County Revenue Sharing Report

1/44 330,000

7,500 7,500 7,500 7,500 7,500 7,500 7,500 7,500 7,500 7,500 7,500 7,500 7,500 7,500

County Revenue Sharing Quarter Ending September 30, 2012 Idaho Code 63-3638(9)(b) Est. 2009 Population

400,842 3,977 83,691 6,001 9,209 45,952 21,199 7,025 40,808 105,772 10,804 2,822 1,124 191,694

Population Percent

25.290% 0.251% 5.280% 0.379% 0.581% 2.899% 1.337% 0.443% 2.575% 6.673% 0.682% 0.178% 0.071% 12.094%

Population Share

2,766,048.85

27,443.67

577,517.81

41,410.48

63,547.59

317,096.20

146,285.74

48,476.69

281,599.54

729,889.88

74,554.04

19,473.48

7,756.27

1,322,802.92

Total Distribution

2,773,548.85

34,943.67

585,017.81

48,910.48

71,047.59

324,596.20

153,785.74

55,976.69

289,099.54

737,389.88

82,054.04

26,973.48

15,256.27

1,330,302.92

Liquor Distribution & Community Colleges

• I.C. 23-404 Distribution of Funds •

FY2011 $10.6 Million to Counties

• I.C. 33-2110A(3) Tuition

50% of Liquor Funds

I.C. 63-3638A Sales Tax on Liquor

Goes into Liquor Fund not Sales Tax

Distribution of Net Funds to the Highway Distribution Account

• • Idaho State Police…………………5% • City, County and Highway District Jurisdictions………………………….38% State Highway Account……....57%

• • The Personal Property Tax Personal property taxes in Idaho were $143 - $153* million out of $1,433 million in total property taxes in 2012 (9.7% statewide, but much higher in some counties).

In addition to furniture, fixtures, machinery, and equipment, the above figure for personal property tax includes rail cars and certain other portions of operating property.

*Does not include $9.3 million tax on personal property paid to urban renewal agencies; but includes portion of operating property assumed to be equivalent 38

Information required

What do we need from you?

• • • Personal Property Reports for every taxing district in the state Proper Categorization by the Assessor Be patient……we are planning to have the information available prior to the legislative session